|May 14, 2003|
-- In an effort to restore confidence in the nation’s pension system, Congresswoman Kay Granger (R-Fort Worth) today voted for legislation giving workers unprecedented new retirement security protections. H.R. 1000, the Pension Security Act, would fix outdated federal pension laws, give workers new freedoms to diversify their retirement savings, and enhance worker access to quality investment advice.
"Recent corporate abuses are proof positive that current safeguards of employee pensions are not adequate. Too many hardworking employees played by the rules and saw their life savings disappear," Granger said. "This bill will give workers the tools they need to fully protect and strengthen their retirement savings."
The Pension Security Act contains several reforms to update pension laws to better protect retirement savings. It gives better information to employees by providing quarterly statements to workers on the value of their retirement saving accounts and provides workers with access to qualified investment advisors to help them manage their portfolios.
The bill also clarifies that employers are responsible for worker savings during "blackout periods," when workers are temporarily barred from making changes to their 401(k) investments. To increase employee control, the bill allows workers to sell company stock and diversify into other investment options once they have participated in a 401(k) or employee stock option plan for three years. Under current law, employers are allowed to restrict a worker’s ability to sell their company’s stock until they are age 55 years old and/or have 10 years of service with the company.
Finally, the Pension Security Act prohibits companies from forcing employees to invest any of their own retirement savings contributions in the stock of the employer. Fifty-six million American workers participate in 401(k), profit sharing, and employee stock ownership plans. Assets in 401(k) plans total $2 trillion.
The Pension Security Act passed the House of Representatives today by a vote of 271 to 157. Similar legislation cleared the House last year but died in the Senate.
President Bush reaffirmed his support for the bill in his budget request and indicated he will sign it into law when it reaches his desk.